Most of us have already heard the alarm bells ringing.
We know that less than 42% of Americans have $10,000 saved for retirement and that most of them are going to be hurting for money in their golden years.
We say “that’s not going to be us!”
Okay, but how do you get there? How do you build a million-dollar rainy day fund for when you stop working?
A big part of the answer lies in looking at how investments are structured, and where you can actually grow your money safely and steadily in today’s markets.
Learn how Privy's unique platform can help you invest in real estate with confidence.
Real Estate Investing and Everything Else
Most investments are based on the price swings of equities or commodities.
Stocks, funds, precious metals and other types of investments look at per-unit prices and move accordingly.
Real estate is structurally different. Instead of being based on per-unit price, real estate is a rare form of “discrete object” investing – investing based on a unique, tangible asset - a property.
So what?
The reality is that when you invest in real estate, you have a lot of opportunities that other investors simply don't have.
Building on Solid Value
You may not know what coffee is going to be worth in 2025, or whether Bitcoin is going to explode, or how much demand there will be for silver in 10 years.
But you can walk through a local property, understand the local market, and envision who will live there and why.
Housing markets are, in some ways, almost guaranteed to grow. People always need places to live – and when you look at the neighborhood you can see at a glance how supply and demand operate.
There are no shadowy market principles or candlestick charts to look at.
Real estate is a uniquely secure investment - it's also a unique way to get revenue streams that you can use to survive – and even thrive – financially.
With real estate investing, you get the property appreciation, which is driving long-term capital gains – but if you rent your real estate properties out, you're also getting immediate cash flow.
Dave Ramsey or anyone else will tell you that's money you can take to the bank.
With any success getting these properties filled, you’re getting rent checks on a monthly basis. That's in additional short-term gain – think of it as a massive dividend paid off every single month by the property your money is backing.
Leveraging Real Estate
If that's not enough, in real estate, you also get to play with other people's money.
Hard money lenders are in the business of offering real estate investors assistance with funding a property purchase.
You can maybe put 20% down into a property and start getting all of these revenue streams right away – without ever saving the hundreds of thousands of dollars it takes to buy the property for cash.
Over the years, you'll gain enough money to buy the property for cash – but you'll be doing it all with a fairly small initial capital investment.
Taxes and More
There's a lot more we could talk about in terms of why real estate is such a good retirement strategy – but one of the best examples is very simple.
It's the mortgage interest deduction.
So while you're getting monthly rental income, watching the property appreciate and doing all of this with a fairly small initial investment, you also get to write off enormous amounts of money on your annual tax return.
This tax giveaway to property owners is solidly written into the IRS tax code, and it's been a major part of real estate investment strategies for decades.
You can take the interest that you pay on in mortgaged property and write it off on each annual tax return.
Again, if you're getting the rental income, the ability to write off a huge chunk of it is yet another advantage for the property investor.
Sure, you can also write off legitimate costs of doing business, such as travel and materials, but the mortgage interest write-off is huge!
What a Retirement Real Estate Investment Strategy Looks Like
The average real estate investor who is planning for retirement will start with one property, and then purchase additional properties as the money grows.
If you have one rental when you're 30, and operate it for 10 years, you should have down payment money for two or three or more other properties. Operate those properties for 10 years, and you have significant equity in all of them.
On the other hand, if you go with a 401(k) or an IRA, you get maybe 5% appreciation every year and you end up with maybe double your money – which isn't so great when you want to have a cool million saved up for retirement.
Even when you retire, your properties keep working for you. Your Social Security check will likely look pretty small next to the rental checks that you keep getting every single month for as long as you own the properties.
Now here's another secret weapon in the smart real estate investor’s playbook.
One of the biggest risks in real estate is buying the wrong property – making the wrong investment in the wrong neighborhood.
Privy can help – with our amazing new fintech resource, you can get the inside scoop on what's happening in a given neighborhood.
Get the information that the MLS doesn't automatically tell you – understand who are buying properties, what they're doing to them, and how that's paying off on a timeline. Get unique transparency into the markets you want to move in so that you can be confident that you're making the right choices.
By aggregating comparative reports through an algorithm process, and providing near-real-time CMAs, Privy is showing you more about a property that you might be interested in, or helping you to see where the deals are in a neighborhood. Take a look at what this revolutionary new service offers and how it can inform your proactive retirement real estate investment strategy.
